Recital 22

(22)Regular reviews and evaluations of CSDs by competent authorities are necessary to ensure that CSDs continue to have in place appropriate arrangements, strategies, processes and mechanisms to evaluate the risks to which CSDs are, or might be, exposed or which could constitute a threat to the smooth functioning of securities markets. Experience has, however, shown that an annual review and evaluation is disproportionately burdensome for both CSDs and competent authorities and of limited added value. Subject to a minimum frequency of once every three years, competent authorities should be able to set a more appropriate frequency for the review and evaluation of each CSD in order to alleviate that burden and avoid a duplication of information from one exercise to the next. Furthermore, in assessing what would be the appropriate frequency and depth of the review and evaluation, the competent authority should consider what would be proportionate, taking into account the size, systemic importance, risk profile, nature, scale and complexity of the CSD. The supervisory capacities of competent authorities and the objective of safeguarding financial stability should, however, not be undermined. Therefore, competent authorities should continue to have the possibility to perform any additional review and evaluation. CSDs providing banking-type ancillary services are also subject to review and evaluation under Directive 2013/36/EU of the European Parliament and of the Council ⁹ .